Commentary and Tracking of a Portfolio of Stocks using approach from "The Little Book that Beats the Market" by Joel Greenblatt aka Magic Formula Investing

Saturday, December 07, 2013

Dec 7 2013 Weekend Update

Weekend Update

Not a great week for me, down a bit over 1 percent. The sharp drops in GTAT and TC-PT were difficult to overcome. I viewed both as an opportunity, not a problem and added to GTAT and TC during the week. I also did some housekeeping during the week and sold TCRD, IP and ABR from my dividend portfolio.

Dividend Portfolio

This continues to be the slacker of my portfolios. It was down 1.5%. I am going to be taking several moves regarding this portfolio. First, I am/have made it smaller with the three sales listed above. Second, if/when we ever get some sort of pullback, I am going to make two or three of the positions MFI/Dividend stocks and they will act like an MFI tranche in that I will hold for a year and then re-evaluate. These will likely be positions perhaps double in size of what I typically put in an MFI stock.

Stock

Shares

Avg Cost

Current Price

Dividends Received

Pct Change

R3K Change

Diff

AOD

21,206

3.96

4.08

4,024.45

7.8%

17.1%

-9.4%

BBEP

4,675

16.13

18.81

3,422.22

21.2%

8.5%

12.7%

CSCO

4,389

17.34

21.28

4,219.92

28.3%

36.2%

-7.9%

CSQ

6,631

8.58

10.61

9,602.93

40.6%

46.6%

-6.1%

INTC

3,754

22.25

24.82

4,490.84

16.9%

30.1%

-13.2%

O

580

20.29

37.08

8,597.27

155.9%

106.2%

49.6%

OIBAX

4,070

4.98

6.07

7,739.02

60.0%

110.6%

-50.6%

SBS

6,211

9.54

10.00

-

4.8%

7.1%

-2.3%

TC-PT

4,000

15.39

12.88

4,061.80

-9.7%

14.4%

-24.0%

TGONF

7,000

10.27

9.82

1,317.50

-2.6%

10.2%

-12.8%

Total Open

47,476

17.8%

25.8%

-8.1%

Closed

12.9%

10.3%

2.6%

Combined

13.6%

12.6%

1.0%

Annualized IRR
Since 12/31/10

17.0%

MFI Portfolio

While my discretionary and Dividend Portfolios struggled during the week. MFI continued to motor along. It was really helped by blow out AGX earnings Thursday night that powered AGX up 17% yesterday. Also, CF gave a presentation that they are considering either taking on more debt or becoming a MLP. That caused CF to go up by more than 10% on the week. I read some analyst reports that said CF could go between $270 and $320 with those structures (Why CF looks to unlock value using more debt, with interest at 4%).

2/1/13 Stocks

Start

Current

Dividend

Pct Gain

R3K
Gain

AAPL

$450.60

$560.02

$8.75

26.2%

21.8%

GA

$6.10

$11.33

$0.42

92.7%

21.8%

STRZA

$16.06

$28.54

$0.00

77.7%

21.8%

CA

$25.07

$32.85

$1.00

35.0%

21.8%

NUS

$41.94

$128.93

$1.20

210.3%

21.8%

Totals

88.4%

21.8%

5/6/2013

Start

Current

Dividend

Pct Gain

R3K
Gain

KLIC

$11.40

$12.21

$0.00

7.1%

13.7%

CYOU

$29.24

$29.83

$0.00

2.0%

13.7%

RDA

$9.74

$17.69

$0.10

82.7%

13.7%

NVDA

$13.85

$15.47

$0.24

13.4%

13.7%

CF

$183.97

$233.09

$1.80

27.7%

13.7%

Totals

26.6%

13.7%

8/15/2013

Start

Current

Dividend

Pct Gain

R3K
Gain

CF

$187.26

$233.09

$1.00

25.0%

9.5%

FLR

$66.06

$77.41

$0.32

17.7%

9.5%

AGX

$15.60

$25.15

$0.75

66.0%

9.5%

KLIC

$11.29

$12.21

$0.00

8.1%

9.5%

RPXC

$15.92

$16.23

$0.00

1.9%

9.5%

Totals

23.8%

9.5%

11/15/13 Stocks

Start

Current

Dividend

Pct Gain

R3K
Gain

AVG

$17.22

$16.50

-

-4.2%

0.6%

ATVI

$17.71

$17.20

-

-2.9%

0.6%

GA

$9.04

$11.33

-

25.4%

0.6%

RPXC

$17.04

$16.23

-

-4.8%

0.6%

SYNA

$48.01

$49.26

-

2.6%

0.6%

Totals

3.2%

0.6%

Category/Tranche

August

November

February

May

Total

Initial
Investment

25,000

25,000

25,000

25,000

100,000

Current Tranche

23.8%

3.2%

88.4%

26.6%

35.1%

Previous
Tranche

14.1%

43.7%

0.0%

0.0%

11.9%

MFI Overall Gain

41.2%

48.4%

88.4%

26.6%

51.1%

Current
Balance

35,289

37,098

47,095

31,644

151,126

R3K Current Tranche

9.5%

36.7%

21.8%

13.7%

20.4%

R3K
Overall Gain

33.7%

36.7%

21.8%

13.7%

26.5%

R3K Balance

33,429

34,170

30,456

28,426

126,481

Annualized IRR

30.0%

45.1%

111.1%

49.1%

58.8%

Date

Differential

12/1/2012

-2.20%

1/1/2013

-1.78%

2/1/2013

-2.26%

3/1/2013

-2.23%

4/1/2013

-0.43%

5/1/2013

2.00%

6/1/2013

4.75%

7/1/2013

4.29%

8/1/2013

6.91%

9/1/2013

10.46%

10/1/2013

19.67%

11/1/2013

19.75%

12/1/2013

23.70%

Current

24.64%

You can see that differential over R3K increased another point in first week of December. This is a stunning table.

Discretionary Portfolio

Stock

Gain

Cost

Price

GTAT

65.6%

5.23

8.67

GNW

114.0%

7.10

15.20

HIMX

19.1%

8.94

10.65

CS

3.1%

28.75

29.65

HIG-WT

28.3%

21.24

27.25

KLIC

9.5%

11.15

12.21

BAC-WTA

22.2%

5.35

6.54

GA

1.5%

11.16

11.33

TC

2.7%

2.19

2.25

Grand Total

38.5%

You will note the cost of GTAT increased from $3.37 to $5.23. That is because I increased my share count during the week (using my multiplier) from 14,000 to 21,000. This move does make GTAT a large position for me, but given the AAPL contract and greater earnings certainty going forward, I am comfortable with an out-sized position. And while it is "large" (9.4% of all the stocks listed in my three portfolios); when you consider all my assets it is still pretty small (under 2%).